Obama budget calls for TVA review, sell-off

The White House’s 2014 budget calls for a strategic review of the Tennessee Valley Authority to pursue a potential sale of the energy giant.
TVA officials said they were not aware until Wednesday morning that the proposal would be part of President Barack Obama’s plans for the upcoming fiscal year.
U.S. Sen. Roger Wicker, R.-Miss., said, “The President’s proposal to sell TVA comes as quite a surprise.”
Although TVA receives no federal funds, the company’s $25 billion capital investment plan is counted in the federal deficit. Obama’s budget speculates that TVA soon will exceed its $30 statutory debt limit.
TVA Chief Financial Officer John Thomas said TVA is financially healthy and has no plans to exceed its statutory debt limit.
“TVA has operated for years without any federal tax dollars, and by law there is no federal taxpayer liability for TVA debt,” said Wicker. “I am skeptical of how this would reduce federal spending.”
As part of TVA’s capital outlays, the company plans to bring Watts Bar Unit 2 nuclear facility online in December 2015 and the TVA board has approved plans to complete the Bellefonte nuclear facility after that.
Thomas said other capital improvement plans include upgrading the transmission system across the region.
TVA has $24.6 billion in debt as of Dec. 31. 2012, the utility said.
In a statement, TVA President and CEO Bill Johnson said, “We will be working with the Office of Management and Budget to provide the information they request regarding the strategic review. While we do this, our employees will stay focused on doing their jobs, serving our customers and the people of the Tennessee Valley.”
TVA was created by President Franklin D. Roosevelt in 1933 and provides power to more than 9 million people in seven states.
“History proves that the TVA experiment has worked well for the people of the Tennessee Valley,” said former TVA Chairman Glenn McCullough. “I would hope that the White House and Congress would be very cautious not to disrupt a program of the federal government that has worked very well for the people of the valley and all of America.”
McCullough added, “Now it’s in the hands of Congress. We’ll have to see how our congressional leaders respond.”
Jordan Russell, a spokesman for U.S. Rep. Alan Nunnelee, R-Miss., said, “Congressman Nunnelee’s priority is what’s best for taxpayers and ratepayers. In tough budget times, we have to consider all options, but any changes to TVA should be thoroughly examined by Congress.”
sarah.robison@journalinc.com